MADRID – Boeing Co. and Embraer SA have approved the terms of a $4.2 billion joint venture that will give the Chicago-based Boeing control over Embraer’s commercial jetliner business.

Under the agreement that was announced this summer, Boeing will take an 80 percent stake in Embraer’s commercial airplane and services business. The Sao Paulo, Brazil-based Embraer will own the remaining 20 percent.

Boeing will have operational and management control of the new company. The commercial aviation joint venture would be led by Brazil-based management, including a president and chief executive officer. The estimated annual pre-tax cost synergies of approximately $150 million are seen by the third year of operations.

“Boeing and Embraer know each other well through more than two decades of collaboration, and the respect we have for each other and the value we see in this partnership has only increased since we announced our joint efforts earlier this year,” Boeing Chief Executive Dennis Muilenburg said in a statement.

The companies also said they have agreed to the terms of a joint venture to promote and develop new markets for the multi-mission medium airlift KC-390, with Embraer owning a 51 percent stake and Boeing the remaining 49 percent.

The transaction, subject to approval from Brazil’s government and ratification by Embraer’s board of directors, is expected to close by the end of 2019.

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